Does a new car really lose value straight after driving off a forecourt?

Posted on July 22, 2020 at 2:57 pm

You have probably heard somewhere that as soon as you drive a brand-new car off the forecourt it loses a significant amount of value straight away but is this fact?

Yes, it certainly is, although the amount of value lost will be entirely dependent on several factors such as the original purchase price. The correct term for this process is depreciation. Car depreciation means the amount lost over time on the value of a car, this is usually estimated yearly.

Say for example you purchase a car that costs £50,000 in 3 years that cars estimated value is likely to be 40% of the price you purchased it for, you will also need to factor in the use of the car for this to be a true representation of depreciation. Generally, car deprecation estimates are based on 10,000 miles driven a year, if you drive fewer miles then your car is likely to lose less value each year, as general wear and tear will be less.

Posted in Cars